"Thousands of men were led
out of the [Nanjing International Safety] Zone,
ostensibly for labour battalions, and lined up and
machine-gunned. Sometimes groups were used for bayonet
exercises. When the victors grew bored with such mild sport
they tied their victims, poured kerosene over their heads,
and cremated them alive. Others were taken out to empty
trenches, and told to simulate Chinese soldiers. Japanese
officers then led their men in assaults to capture these
"enemy positions" and bayoneted the unarmed defenders." -
Edgar Snow, Scorched Earth, London (1941), p. 62.

According to Professor Michael
Bazyler's recent article in the University of Richmond Law
Review, "The phrase "opening the floodgates of litigation"
connotes a pejorative meaning in American legal argument.
Most often, it is used by courts as a reason not to allow a
certain case to proceed for fear that it would overburden
both courts and society with a new class of lawsuits."
(1) However, in the case of Holocaust and World War
II related lawsuits, this term has had a more felicitous
meaning. Holocaust related lawsuits have been for the most
part successful efforts for both the victims in obtaining
emotional closure, justice, and restitution and the class
action lawyers who reap financial gains in the form of
handsome fees from multimillion and billion dollar
settlements. (2)

Of particular importance to
litigating World War II financial issues is California Code
of Civil Procedure Section 354.6. It permits any World War
II slave labor or forced labor victim, or their heirs, to
bring suit in a superior court of California against any
entity or successor in interest for whom the labor was
performed, either directly or through a subsidiary or
affiliate. An action brought under this section shall not be
dismissed on statute of limitations grounds if commenced on
or before December 31, 2010. California therefore has
created a litigation friendly forum for victims of WWII
atrocities and war crimes by legislatively disposing of any
legal objections to staleness known as the Statue of
Limitations. California is the only state with such a law
and not surprisingly has the second-largest population of
Holocaust survivors. Bazyler, a leading authority on
Holocaust law predicts the next wave of World War II-era
slave labor lawsuits will be filed in California.
(3)

Class action law firms have
enjoyed inordinate success against corporate defendants
tainted by involvement with the Third Reich and its allies.
These corporate entities became involved in joint ventures
with the Nazis and others fascists for the purpose of
self-aggrandizement. Profits in the form of stolen loot,
slave labor proceeds, and money laundering on behalf of the
Axis, enriched banks, insurance companies, and
conglomerates. Profits for the most part were not disgorged
following the war and the corporations and their successors
enjoyed the fruits of their misdeeds.

The class action process in
regards to World War II claims rests on three legs: legal,
political, and mass media. A successful combination of
litigational prowess, media attention, and political support
saw successful settlements won or in progress against Swiss,
Austrian, German, and French Banks, German Corporations, and
some European Insurers. Claims against other entities are
ongoing: The Vatican, Insurance companies, and potential
suits against South American, Turkish, and Iberian banks.
Surprisingly, Nazi profiteers included not only German and
Neutral corporations but American multinationals like Ford,
General Motors, and Chase Manhattan. Left out of the
scenario until 1999 was the vast network of Japanese
zaibatsus or wartime conglomerates that powered Japanese
militarism.

"For 50 years, the Japanese
government and Japanese private companies and banks have
rebuffed attempts by victims of Japanese War Crimes during
WW II -commonly known as "Holocaust in the Pacific"."
(4) Indeed the Japanese War Crimes have a much lower
profilet than those of the Nazis and their allies. The
victims were mainly Asian but America is partially to blame.
The International Military Tribunal for the Far East
established in 1946 was supposed to be a counterpart to the
Nuremberg Tribunal, it was not and was under the effective
control of General MacArthur. (5) Conspicuously,
absent from the tribunal's list of defendants were
representatives of the zaibatsus. The situation of Japanese
national guilt is complicated by the seeming pardon of the
Japanese Emperor Hirohito for war crimes and the nuclear
annihilation of Hiroshima and Nagasaki. Further American
intervention against Communism in East Asia required a
stable Japan. Prosecuting former militarists would harm the
Japanese economic recovery and was contrary to the American
national interest.

Attempts to seek legal recourse
against Japanese industry mainly in Japan have been largely
ineffective in the past. This is not surprising as similar
problems plagued lawsuits against Germany and its wartime
allies until 1995. In 1995, three class action lawsuits were
filed against Swiss banks by Holocaust survivors, this
opened the "floodgates of litigation" that Professor Bazyler
noted. Bazyler believes there is no single reason that
Holocaust lawsuits have been successful now but notes an
evolutionary process in the Federal Court that began in 1980
with "Filartiga v. Pena-Irala [630 F.2d 876] the
landmark 1980 Second Circuit Court of Appeals opinion which
held that the Alien Tort Claims Act can allow a victim of
state-sanctioned torture to bring suit against the torturer
in the United States even though the torture took place on
foreign soil. (6) The litigational opening up process
included successful human rights cases in United States
courts involving, Marcos, alleged Serbian war criminal
Karadzic, and the 1991 Torture Victim Protection Act in
which Congress granted foreign torture victims access to US
courts. Declassification of wartime government documents
both here and abroad have aided prosecution of Word War II
civil cases as has favorable public opinion, the media, and
political pressure groups.

California Senate Bill No. 1245
which established Section 354.6 of the California Code of
Civil Procedure noted that "California has a moral and
public policy interest in assuring that its residents and
citizens are given a reasonable opportunity to claim their
entitlement to compensation for forced or slave labor
performed prior to and during the Second World War."
California has the second largest population of Holocaust
survivors, an influential Jewish community and an even more
important Asian component, Chinese, Koreans, Vietnamese, and
Filipinos, all areas occupied by the Japanese during the
Second World War.

There are now at least a dozen
court cases pending in California against Japanese
corporations demanding compensation for Word War II forced
labor and atrocities. The defendants read like a roster of
Japanese industry. Japanese industry contends it cannot be
held responsible for the wartime zaibatsus actions.
Corporate defendants claim that even though they carry the
same name as the zaibatsus, that in fact the conglomerates
were broken up after Word War II by the American
authorities. This argument ultimately proved to be an
unsuccessful one for corporate defendants in the recently
settled ten billion mark German slave labor litigation and
will likely prove unhelpful for Japanese defendants too. The
reason: there was simply too much unjust enrichment of
corporate defendants during the war for a mere name change
or reorganization to provide absolution.

There is however a thornier
legal defense available to the defendants. Japan has already
paid twenty seven billion dollars (7) in reparations
mainly under the provisions of the 1951 San Francisco Peace
treaty. (8) There have been bilateral agreement with
other countries too although the United States, China, and
Taiwan waived reparations. Nonetheless, this may not prove
an insurmountable obstacle, German corporations had raised
similar defenses but ultimately settled their cases and the
wording of the 1951 San Francisco treaty is open to
interpretation as to whether Japanese corporations come
under the treaty provisions or if the treaty is strictly a
state to state agreement. (9)

Potential claimants include
former prisoners of war and civilian internees, American,
Filipino, Australian, British, Dutch, New Zealander, French,
Indian and Chinese. Forced labor and financial claims may
well involve claimants from every country occupied by the
Japanese: Micronesia, Papua-New Guinea, Burma, Malaysia,
Indonesia, Korea, Taiwan, Philippines, Vietnam and China.
Potential settlement amounts could be in the billions of
dollars given the scope of matter. The zaibatsus had a
reprehensible record of using slave labor and POW's in
mines, factories, and building railroads under inhumane
conditions. Shipping companies transported prisoners and
comfort women in what has been alleged to be the largest
slave shipping operation since the 19th century. Biological
weapons were developed using live subjects, with the
involvement of wartime industry.

While several lawsuits have
been filed mainly in California and more are anticipated, in
my estimation, one lawsuit above all typifies the phenomena.
(10) The lawsuit press release reads: "On December 7,
1999 at the Superior Court House for Los Angeles County at
precisely 10:55 am Dec. 7th (the exact time in LA that
Japanese bombed Pearl Harbor 58 years ago" the complaint was
filed. Defendants include Nippon Steel, Mitsubishi and
Mitsui. Each corporation has a substantial presence in
California and the United States and has antecedents as a
Japanese zaibatsu that used slave labor. Significantly, Ed
Fagan heads up the lawyers behind the lawsuit. The outspoken
Fagan has become very successful, very quickly, in Holocaust
related cases, his victories include settlements against
Swiss and Austrian Banks, European insurance companies,
German corporations, and an ongoing claim against the
Austrian government that will likely be settled too.
Holocaust cases in which he has participated have grossed
approximately seven billion dollars.

Fagan's strategy is no secret.
The lawsuit (complaint) is a carefully researched blend of
legal issues and fact. The complaint includes plaintiffs
statements of horrible atrocities: "Hell ships" in which
prisoners were packed without food or water, torture by
zaibatsu overseers with names like "Dr. Death, the Maggot,
the Mad Mongrel, the Boy Bastard, the Boy Bastard's Cobber,
the Tiger, Poxy Paws," and statistical death rates of forced
labor on the Burma-Thai railroad combine for a desired
effect. According to Fagan, the "goal of the suits is to
bring so much public pressure on the Japanese that they will
opt for a political settlement similar to one being brokered
among European firms and the U.S. and German
governments."(11)

Fagan's lawsuit and the other
are based upon California Code of Civil Procedure §
354.6 and International Law. The defendants must prove
§ 354.6 to be unconstitutional if they hope to prevail,
perhaps by arguing that California has usurped Federal
powers by engaging in foreign policy. The sheer volume of
claims and potential claims however may soon obscure the
legal issues, over a million Filipino forced laborers worked
mines and plantations owned by the zaibatsus, (12)
victims of biological experiments, and comfort women will
all demand their day in court. Even more damaging is a
potential assault on the Japanese banking system by
Fagan.

Copying a successful tactic
from the Swiss bank case, Fagan has linked Japanese banks
with the zaibatsus. Fagan alleges zaibatsus "looted and/or
laundered personal and business assets during occupation -
including forced use of "Japanese script"."

Fagan has made the following
allegation in his complaint against Japanese
banks:

"With regard to
capital, assets and foreign currency, the defendant
Japanese Banks participated in, profited from and became
unjustly enriched by, among other things (a) the wrongful
conversion of business and personal assets of persons and
entities in the countries occupied by the advancing
Japanese military, (b) the financing of, transaction fees
charged for, and commissioned earned through the
conversion of local currency to Japanese yen, in each and
every country occupied by the Japanese from 1937 to 1945
and (c ) the financing, transaction fees, commissions and
other monies earned by, with and/or related to the
defendant Japanese companies that employed and/or used
slave and/or forced labor of civilians and prisoners of
war."

The money involved in such
transactions would be staggering, the Japanese were known
for their systematic looting of the greater East Asia
Coprosperity Sphere, paying back even a fraction of the
amount would be painful:

"The defendant
Japanese companies and banks actively and/or passively
allowed, participated in, profited from and/or became
unjustly enriched by a series of systematic human rights
violations, including but not limited to cannibalism,
slaughter, torture, starvation, rape, forced
prostitution, biological and chemical warfare and medical
experimentation."

The Japanese corporations are
now enmeshed with some of the worst atrocities of the last
century, no matter which way they squirm or maneuver; they
will become besmirched.

Given the interlocking nature
of the keiretsu system and the vagaries of the post war
break up of the zaibatsus, Japanese banks and corporations
seem particularly vulnerable. And indeed if Fagan's
allegation that each zaibatsu had its own wholly owned bank,
Mitsui Bank etc., is true and the banks were not made to
account for wartime profits nor disgorge them, but enjoy to
this day ill gotten gains; the results. The impact of these
lawsuits may well dwarf the German slave labor
settlement.

Finally, on an emotional level
can the Japanese afford to ignore allegations that they were
worse than the Nazis? Fagan's claims of genocide, mass
prostitution, atrocities, slave labor, human medical
experiments, beheadings, torture, cannibalism and the like
may have an effect far from California. It must be noted
that North Korea has not abandoned wartime claims against
Japan (13), forced labor lawsuits have been filed in
the Philippines against Japanese corporations, and the
Chinese feeling that Japan has not properly atoned for its
past deeds may all combine to bring the necessary
international pressure on Japan to settle regardless of
legal issues.

The Japanese atrocities like
their Nazi counterparts are well documented. Cold War
politics and American leniency perhaps allowed the Japanese
corporations and banks to escape fiscal responsibility. More
to the point however, the American legal system has
demonstrated it can successfully address human rights issues
even fifty years after the fact. The Germans, Swiss, and
Austrians have paid for their financial crimes with minimal
political effect and only minor backlash (14), it is
now time for Japanese corporations to come to terms with
their past. California has provided the forum, the question
will be whether the Japanese corporations choose to fight
and face potentially damaging revelations about past conduct
splashed across the headlines or will they seek a compromise
as their European counterparts have done?

References

1 34 U. Rich. L. Rev. 1, p.
5

2 The largest settlements to
date have been one and quarter billion dollars in the Swiss
Banks litigation and approximately five billion dollars in
the German Slave Labor cases.

3 34 U. Rich. L. Rev. 1, p.
46

4 http://www.japanesewwiiclaims.com
This website is maintained by Ed Fagan, the flamboyant New
York attorney who initiated and won the Swiss Bank case and
has now targeted the Japanese.

14 Some might claim that the
recent success of Joerg Haider of the Austrian Freedom party
is related but the allegation that former Austrian President
Kurt Waldheim was a Nazi war criminal in Yugoslavia was at
least equally alienating to the Austrians.

About the author

Jonathan Levy is a California
attorney who has represented organizations and individuals
in a variety of Holocaust related lawsuits including
banking, insurance, and slave labor matters. He can be
contacted at: